BASSETERRE, St. Kitts – THE Royal Bank of Canada (RBC) has entered into an agreement with a consortium of indigenous banks within the region to sell all of its banking operations in the Eastern Caribbean.
The bank made this announcement in a press release yesterday (Dec. 12), stating that the transaction is subject to regulatory approval and other customary conditions, and is expected to be finalised in the coming months.
Head of RBC Caribbean Banking, Rob Johnston said that the bank’s decision to sell its operations was based on a number of factors, including the long-term success of the entity.
“Consistent with our strategy of being a competitive leader in the markets where we operate, RBC is always evaluating opportunities for our business. Earlier this year, we were approached by a consortium of indigenous banks with their proposal to acquire all RBC Eastern Caribbean operations.
“After a review of our operations and strategy, we determined this opportunity was a good decision for the long-term future success of RBC Caribbean and, also, that it aligned with our vision to help our clients thrive and communities prosper.”
The release stated that the sale encompasses branches of Royal Bank of Canada in Antigua, Dominica, Montserrat, St. Lucia, and St. Kitts and Nevis, as well as regional businesses operating under RBC Royal Bank Holdings (EC) Limited in Nevis, Grenada and St. Vincent and the Grenadines.
Collectively, it added, those operations are referred to as “RBC Eastern Caribbean”.
Purchasing of the consortium, which is made up of five financial entities, includes the First National Bank of St. Lucia, Antigua Commercial Bank Ltd., National Bank of Dominica Ltd., the Bank of Montserrat and Bank of Nevis Ltd.
The Managing Director of the First National Bank of St. Lucia, Johnathan Johannes, said: “We formed the consortium for the express purpose of expanding the scale of the locally-owned financial entities in the Eastern Caribbean Currency Union. This transaction gives us the size and scale to play a more active role in the development of our respective countries. We see this transaction as the first step in achieving even greater synergies, efficiencies and cross-territory marketing opportunities.”
Johnston pointed out that the RBC has been operating in the Caribbean for more than 100 years, which is longer than the bank’s operation in many parts of Canada.
“We remain committed to the future of the Caribbean and to a vision of digital innovation that transcends traditional services,” he said, adding that the transaction would allow them to realign and focus their strategy on Caribbean markets where they could achieve that vision most successfully.
He continued: “Self-determination is the highest level of empowerment, and the indigenous banks acquiring this business will now have an increased opportunity to influence the development of their communities.”
Speaking on behalf of the local banks, the Managing Director of the First National Bank of St. Lucia said, “…We embrace and eagerly anticipate that opportunity.”
The consortium was advised by PwC (JA), led by Wilfred Baghaloo, who added: “This transaction demonstrates that Caribbean countries and businesses have the capacity and capability to come together when the circumstances are right.”
The release stated that financial terms of the transaction were not disclosed, but the RBC would release its first quarter 2020 results and host an earnings conference call on February 21, 2020.
